Laws of the People's Republic of China

The General Administration of Customs, the Ministry of Foreign Trade and Economic Cooperation

Official Reply of the General Administration of Customs and the Ministry of Foreign Trade and Economic Cooperation Concerning the Recognition of Capital Contribution of Enterprises Invested by Oversea Chinese and Compatriots from Hong Kong, Macao and Taiwan

ShuJianYi [1991] No.786

July 19, 1991

Guangzhou Customs:

Your telegraph dated June 13 has been received. We have studied the request of Zhaoqing Hengjin Electronic Limited Company for preferential treatments stated in the Decree No.64 of the State Council and conclude that, in accordance with Article 4 of the Law on Chinese-foreign Equity Joint Ventures, the proportion of foreign investment in a Chinese-foreign equity joint venture is generally not lower than 25%. According to this principle, overseas Chinese investors and compatriot investors from Hong Kong, Macao and Taiwan should contribute no less than 25% of the registered capital of the joint ventures they invest in so as to classify these joint ventures as those invested by overseas Chinese and compatriots from Hong Kong, Macao and Taiwan. Therefore, the request of Zhaoqing Hengjin Electronic Limited Company should be handled in line with the related provisions of the country on enterprises with foreign investment.

That is hereby the reply.